The World Won't Buy Unlimited U.S. Debt

Barack Obama has spoken often of sacrifice. And as recently as a week ago, he said that to stave off the deepening recession Americans should be prepared to face "trillion dollar deficits for years to come."

But apart from a stirring call for volunteerism in his inaugural address, the only specific sacrifices the president has outlined thus far include lower taxes, millions of federally funded jobs, expanded corporate bailouts, and direct stimulus checks to consumers. Could this be described as sacrificial?

Foreign countries are buying U.S. Treasurys and are financing the huge debt. What will happen when they quit buying and start spending the notes? Hint: debt bubbles, like all bubbles, eventually pop.